TSYS Posts Increased Profit in Q3, Increases 2018 Outlook

Staff Report From Columbus CEO

Wednesday, October 24th, 2018

TSYS reported results for the third quarter of 2018. “We were very pleased to continue our momentum and performance for the third quarter as all three of our segments delivered exceptional results. This performance enables us to again raise our guidance for the year while continuing to invest for the long term,” said M. Troy Woods, chairman, president and chief executive officer of TSYS.

Highlights for the third quarter of 2018 vs. 2017:

  • Total revenues were $1,015.4 million, a decrease of 18.6%. The decrease is the result of adopting ASC 606.(1)

  • Net revenue (non-GAAP), which excludes reimbursable items, interchange and payment network fees, was $964.6 million, an increase of 13.1%.

  • Net income attributable to TSYS common shareholders was $156.0 million, an increase of 26.7%. Diluted EPS were $0.85, an increase of 28.0%.

  • Adjusted earnings (non-GAAP) were $212.4 million, an increase of 30.6%. Adjusted diluted EPS (non-GAAP) were $1.16, an increase of 32.0%.

  • Adjusted EBITDA (non-GAAP) was $348.5 million, an increase of 12.6%.

(1) On January 1, 2018, TSYS adopted Accounting Standards Codification (ASC) 606 “Revenue from Contracts with Customers” using the modified retrospective transition method. The most significant impact of adopting ASC 606 in 2018 is primarily the result of gross versus net presentation of interchange and payment network fees. In 2018, these fees collected on behalf of the payment networks and card issuers are presented “net” of the amounts paid to them, as opposed to the “gross” presentation for certain of these fees in 2017.

Revised 2018 Outlook

TSYS' revised 2018 guidance is as follows:

(in millions, except per share amounts) 2018 Financial Outlook Range(1) (2) Percent Change
Total Revenues (GAAP) $3,990 to $4,040 (19%) to (18%)
Net Revenue (non-GAAP) $3,790 to $3,840 11% to 13%
Earnings per share:
Diluted EPS (GAAP) $3.09 to $3.15 (2%) to 0%
Adjusted diluted EPS attributable to TSYS common shareholders (non-GAAP) $4.41 to $4.47 31% to 33%
Weighted average diluted shares outstanding 184  

(2)The estimated impact of the adoption of ASC 606(1) on TSYS' revised 2018 Outlook is as follows:

Total revenues
Net revenue
Diluted EPS
Adjusted diluted EPS
($1,700) to ($1,675)
($69) to ($62)
($0.04) to ($0.03)
($0.04) to ($0.03)